Every investor is aware of the financial tool to measure the systematic risk, i.e., BETA and there is one factor that motivates these investors to switch from risk-less to risky securities i.e. ![]() Now the question is why would an investor devote his money to these securities knowing of the risk present in them? Do they have some financial tools to measure these risks? Or is there any other factor that motivates these investors to invest in risky securities? The answer to these questions is YES. Every second, someone in the world invests in Equity, Bonds, and other Hybrid securities in spite of knowing the fact that there are systematic risks (risks that can’t be eliminated through diversification) involve in these securities.
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